PROJECT M
 

Safety in numbers

Dutch innovation in collective defined contribution allows risk to be shared and thus more easily controlled

Brendan Maton
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Safety in numbers

Dutch innovation in collective defined contribution allows risk to be shared and thus more easily controlled

Brendan Maton

Dutch pensions at a glance

  • DC plans remain a small percentage of Dutch occupational retirement provisions: just over 7% of all funds as at the end of 2008, according to De Nederlandsche Bank (DNB).
  • This has much to do with the concentration of the country’s savings. Although there are 567 funds, just two – those for civil servants and health-care workers – account for half of all assets. The largest, ABP, can trace its roots back to 1922.
  • Both, however, have already reformed their provisions in the last decade. In view of findings of two major national reports, further changes can be expected. Jean Frijns, ABP’s former head and author of one report, likens these funds to “aging giants who, if things go badly, could end up in the position of sinking giants.” Clearer risk sharing among members and sponsors is called for. So expect to see more collective DCs.

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